Gift cards have quietly consumed more and more space on retail displays over the years. They have seemingly been the perfect gift for those on our gift lists for whom we don’t want to waste precious dollars buying something that will not be used or appreciated. But if you've never cashed one in, you might be surprised to learn that many cards become worthless following a brief period prior to expiration and even deduct usage fees from the gifted value. Fortunately, these nefarious tactics will soon be restricted.
According to yesterday's Huffington Post "The Federal Reserve issued new rules on Tuesday to protect Americans from getting stung by unexpected fees or restrictions on gift cards." And Comsumers Union web site states: "The Credit Card Act of 2009 prohibits gift cards (store issued or bank issued "gift cards") from expiring before 5 years from the date of purchase or when money was last loaded onto a card, and prohibits fees for the first 12 months." Interestingly, CU lists 32 States that have previously enacted similar regulations but according to Eyewitness News: the Credit Card Accountability and Disclosure Act … announced by the United States Federal Reserve Tuesday … reinstates Connecticut's [and presumably other state’s] authority to enforce its gift card laws on all cards, including those issued by national banks ... [and that] Each year, consumers in Connecticut lose millions of dollars in unused and expired gift cards."
If I'm correct in making this accusation, we can expect to see far fewer gift cards offered on retail store kiosks in the future. The new regulations are set to take effect this summer on the 22nd of August, 2010.